July canola is down $2.30/mt with November canola down $.10/mt, July soybean oil is down .23 cents/pound, August European rapeseed is up 1.00 euro per mt and July Malaysian palm oil is up .16%. July oats are up 4 3/4 cents/bushel. June crude oil is up $.18 per barrel, June ULSD is down $.1394 per gallon, and the June Canadian dollar is up .00005 at .73105. The June U.S. dollar index is up .195 at 98.375 and the May Brazilian real is down .00065 at 0.20280.

Grain and oilseed markets extended gains in early trade on a variety of bullish factors contained within Tuesday's WASDE update. Optimism over Trump's trip to China helped provide an early boost with some of that fading as midday nears on reports suggesting the meeting between leaders will quite likely be low-key with few new announcements being made. If true, that could result in profit taking in both the soybean and corn (and related) markets. We shall see soon enough.

In the meantime, crude oil rallied following the release of the weekly inventory report from the EIA. Greater than expected crude oil drawdowns amid record exports supported prices. Crude oil stocks (excluding the SPR) were down 4.3 million barrels while the trade was looking for a 2.3-million-barrel drawdown. The SPR inventories fell by an additional 8.6 million barrels as emergency releases continued. Gasoline inventories fell 4.1 million barrels while the trade expected a 2.6-million-barrel draw and distillates inventories were stable (up .2) when a 2.1-million-barrel draw was expected. The latter point left diesel prices under pressure and weighed on soybean oil and canola.

There has been no news on the Strait of Hormuz front (as expected), but a very hot PPI report stoked inflation fears further. April headline PPI came out at a whopping 6% compared to expectations of 4.8% while core PPI hit 5.2% with the trade looking for 4.3%. That did pressure treasuries but not to the extent that one would think, causing the U.S. 10-year rate to jump to 4.50% at one point. Despite that, stocks have been able to shrug off all the bad news and remain mixed, hoping for positive announcements out of China. With the higher interest rates, the U.S. dollar has held firm.

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